Notting Hill Genesis (202105836)

REPORT

COMPLAINT 202105836

Notting Hill Genesis

28 February 2023

Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice, or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

The complaint is about the landlord’s:
1. Response to the resident’s concern’s over the accuracy and transparency of service charge billing.
2. Response to the resident’s request for her rent increase letter regarding the 2022/23 period.
3. Handling of the resident’s complaint.
4. Response to the resident’s concerns that it had overcharged her in regard to her 2019/2020 service charges and the subsequent effect this had on her following years’ service charges.

Jurisdiction

What we can and cannot consider is called the Ombudsman’s jurisdiction. This is governed by the Housing Ombudsman Scheme. When a complaint is brought to the Ombudsman, we must consider all the circumstances of the case as there are sometimes reasons why a complaint will not be investigated.
After carefully considering all the evidence, in accordance with paragraph 42(e) of the Housing Ombudsman Scheme, the following aspect of the complaint is outside of the Ombudsman’s jurisdiction.
1. The landlord’s response to the resident’s concerns that it had overcharged her in regard to her 2019/2020 service charges and the subsequent effect this had on the resident’s following years’ service charges.
The resident has mentioned that she is dissatisfied with service charges levied by the landlord in relation to projected and actual costs. Under Paragraph 42(e) of the Housing Ombudsman Scheme, we will not consider complaints that concern the level of service charge or rent or the increase of service charge or rent. Complaints that relate to the level, reasonableness, or liability to pay rent or service charges are within the jurisdiction of the First-Tier Tribunal (Property Chamber) and the resident would be advised to seek free and independent legal advice from the Leasehold Advisory Service (LEASE) (https://www.leaseadvice.org/) in relation to how to proceed with a case.
The resident’s complaint also concerns information she was provided about the service charges and the landlord’s response to the queries she raised about the difference in the service charge. The Ombudsman cannot review complaints about the increase of service charges and determine whether service charges are reasonable or payable. The Ombudsman also cannot rule on any of the invoices provided as evidence. However, we can review complaints that relate to how the information about service charges was communicated by the landlord.

Background

The resident is an assured tenant of the landlord. The landlord has a managing agent who manages the resident’s property.
The resident had a separate complaint determined by this Service in April 2021. As a resolution, the landlord was ordered to provide the resident with a detailed breakdown of her 2019/20 service charges. These were subsequently provided to the resident in June 2021. The resident contacted the landlord on a further four occasions between September 2021 to March 2022 querying the service charges, but it assured her they were correct and no further actions needed to be taken.
The resident raised a complaint with the landlord on 21 March 2022. She confirmed she had now received a breakdown of her 2019/20 service charge costs, but she believed the breakdown to be inaccurate due to charges being levied that should not have been. The resident also stated that her new rent amount was due to start on 1 April 2022 for the 2022/23 financial period, but she had yet to receive her rent increase letter. The resident requested for this to be provided. The resident stated that the issues identified had impacted her mental health and exacerbated her stress and anxiety.
The landlord responded to the resident’s complaint by apologising for the inconvenience caused to her. It stated that errors had been made in regard to the service charge billing and that changes in operations and systems internally meant it had not got the process right. It also identified failings with the information being provided by its managing agent, and that final service charges had not been thoroughly checked which led to the resident being charged an incorrect amount. In regard to the resident’s complaint about not receiving her rent increase letter, the landlord stated it had sent this in February 2022, but would resend this to her. The landlord offered the resident £150 compensation for the inconvenience caused by the issues she raised.
Following the resident’s complaint, on 5 July 2022 the landlord reviewed the resident’s service charge account again. It then identified that, rather than there being a deficit of £1870.72, there was in fact a surplus of £172.86 for the 2019/20 period. It stated it had made further amendments to remove the communal heating charge which resulted in surplus of £192.14. The landlord apologised for this oversight and arranged for the resident’s account to be credited accordingly.
The resident referred her complaint to this Service as she believed the landlord had not provided all of the information she requested during the complaint procedure. As a resolution to her complaint the resident requested:
1. To know why she was being billed for hot water and heating privately, despite her contributing to hot water and heating in her service charges.
2. To be provided with evidence to show that the errors identified by the landlord in issuing her 2019/20 charges had been corrected.
3. Transparency in the service charge process, including full details of where her service charges are attributed to and evidence of relevant costs.

Assessment and findings

Policies and procedures

The Landlord and Tenant Act 1985 requires the landlord to provide the resident information about:
1. Service charges of the tenant
2. Any associated service charges; and
3. Relevant costs relating to service charges.
The resident’s tenancy agreement states that, when any changes in rent occur, 28 days’ notice must be provided in writing, informing the resident of the increase or decrease. This notice must also specify the new rent amount.
The landlord’s complaints policy states that it will respond within 10 working days at stage one of its complaint procedure and within 20 working days at stage two.

Scope of investigation

The resident has requested for this Service to investigate why she had been paying for gas and electric as a part of her service charges but had also been charged by a third-party company for the same utilities. As this was not raised as part of the original complaint, this matter will not be considered by this investigation as the landlord needs to be provided with the opportunity to investigate and respond to these particular concerns. This is in accordance with paragraph 42(a) of the Housing Ombudsman Scheme which states that the Ombudsman will not consider complaints which are made prior to having exhausted a member’s complaints procedure. The resident may wish to raise a new complaint with the landlord if she wishes to pursue this matter.
In correspondence with both this Service and the landlord, the resident has referenced how the landlord’s actions have impacted her mental health by exacerbating her stress and anxiety. The Ombudsman does not doubt the resident’s comments regarding her mental health, but it is beyond the remit and expertise of this Service to determine whether there is any direct or causal link between the landlord’s actions or lack thereof and a complainants reported health conditions. This is an accordance with paragraph 42(g) of the Housing Ombudsman Scheme which states that the Ombudsman will not consider complaints where it is considered quicker, fairer, more reasonable, or more effective to seek a remedy through the courts, other tribunal or procedure. However, this investigation has considered the general distress and inconvenience the reported circumstances may have caused the resident.

The accuracy and transparency of service charge billing

In accordance with paragraph 42(m) of the Housing Ombudsman Scheme, we may not investigate matters which the Housing Ombudsman has already decided upon. In case 202001199, this Service investigated the landlord’s handling of her request to be provided with her 2019/20 service charges which she believed to have been delayed. It was identified that delays in this process had occurred and the landlord had yet to provide the resident with the breakdown as per its policies. As part of this investigation, the landlord was ordered to provide the resident with an overview of her service charge breakdowns for the period stated and it provided the resident with a version of the breakdown in June 2021. However, it was identified by the landlord in July 2022, that the 2019/20 service charge breakdown was incorrect. Therefore, this report will focus on events that have occurred after June 2021, and the subsequent complaint.
In its complaint response, the landlord stated it was its aim to provide accurate and correct service charge billing. This is also in accordance with the Landlord and Tenant Act 1985 which states that the landlord is required to provide the resident with information about her service charges, any associated service charges and the relevant costs relating to service charges.
Following her previous complaint, this Service ordered the landlord to provide the resident with a breakdown of her service charge billing for 2019/20 in April 2021. This was to be completed within six weeks of the Ombudsman’s determination, which the landlord complied with as it provided the resident with a copy of her service charges in June 2021. However, the landlord adjusted this service charge billing period a year later. On 8 April 2022 it advised the resident there was a deficit of £381.39 on her account, however this was again changed on 5 July 2022 to a surplus of £127.39. Therefore, whilst it appeared that the landlord had acted in compliance, it subsequently came to light in July 2022 that accurate information was not provided. Therefore, it is evident to this Service that the breakdown provided was incorrect and not in compliance with the orders established by this Service in April 2021.
The landlord provided an explanation to the resident as to why these costs had changed, but this was confusing to the resident and she expressed this to the landlord on a number of occasions, including when she advised that she “did not understand how the charges had reduced”. In the Ombudsman’s opinion the landlord could have been clearer in its communication with the resident regarding these issues, and provided a detailed breakdown of what charges she had been correctly charged for as well as those which were incorrectly charged. It could also have provided further details and a fuller explanation as to why these errors occurred in further detail, as it was evident that the resident remained “confused” by the changes.
It is of concern that the landlord has failed to collate and provide the resident with accurate service charge bills for a period dating back over two financial years. It is acknowledged that the landlord did provide some explanation to the resident regarding the reasons for this, but in the Ombudsman’s opinion its explanation was insufficiently detailed and appears to not cover the issues at the heart of the resident’s concerns about the landlord’s service, including its lack of control and understanding of the service charge process in relation to assured tenants. In its response, the landlord was also overly reliant on information provided to by the third party managing agent, which had previously provided incorrect information to the landlord which remained unquestioned by itself and recharged to the resident without any additional checks completed.
It is also evident that there has been a breakdown in the landlord and resident relationship due to these errors. This Service acknowledges why the resident may feel cautious regarding the information provided by the landlord, as it is not in dispute that this has changed on numerous occasions, leading to deficits and surpluses on her account which the resident feels remains unexplained. As it remains unclear whether the landlord has provided the resident with an updated version of the service charges which show her to be in a surplus and evidences the amendment of the service charges, this Service has ordered the landlord to provide the resident with this information within four weeks of this report, if it has not already done so.
The landlord has acknowledged that failings had occurred in regard to providing service charge documentation, but that it has been making active attempts to improve its services. However, from the information available, the issues regarding the presentation of information relating to service charges appear to have been ongoing for an extended period of time. The evidence seen by this investigation indicates that the landlord may have systemic issues surrounding its processes and ability to provide residents with accurate information in relation to their service charges, and that these errors have continued to present themselves for an extended period. In light of this, the landlord is ordered to undertake an urgent review of its policies and procedures in regard to its management of service charges and implement changes to improve its customer service to residents.
In reference to the resident’s own case, the landlord is also ordered to pay her £350 compensation in recognition of the inconvenience its failings caused and her time and trouble chasing it for responses and accurate information. This is an increase on the £150 offered by the landlord during its complaint procedure and is in line with the Ombudsman’s Remedies guidance (published on our website) for cases where there has been service failure which adversely affected the resident, but has had no permanent impact.

The resident’s request for her rent increase letter regarding the 2022/23 period

In the resident’s complaint, she advised the landlord had informed her that rent was due to change on 4 April 2022 but she had yet to receive a letter clarifying the new rent amount. The resident requested that she be provided urgently with a letter confirming the rent increase for the 2022/23 financial year as she would need to provide this to Housing Benefit department, who provided payments towards the resident’s rent, so as to not go into arrears.
The tenancy agreement states that when any changes in rent occur, 28 days’ notice must be provided in writing, informing the resident of the increase or decrease. This notice must also specify the new rent amount. The resident has stated that she did not receive her rent increase letter until May 2022. However, the landlord has provided this investigation with evidence that a letter notifying the resident of the rent increase for 2022/23 was sent out on 22 February 2022. While it is understandable that the resident would be concerned at not receiving a letter and this would have caused concern regarding upcoming rental and benefits payments, the landlord appears to have acted reasonably, and in accordance with its obligations under the tenancy agreement, by sending out a letter two months ahead of the proposed rent increase. It would be outside the landlord’s control if the letter was not received by the resident. Once it had been informed by the resident that she had not received it, it responded reasonably by sending a further copy within its stage one complaint response. This was an appropriate step for it to take and, from the information available, there is no evidence of service failure by the landlord regarding its handling of this issue.

The landlord’s handling of the resident’s complaint

The landlord’s complaints policy states that a stage one response should be provided within 10 working days and a stage two response should be provided within 20 working days.
The resident raised a complaint on 21 March 2022, but did not receive a stage one response until 8 April 2022, 14 working days after the complaint was submitted. The landlord advised that this delay was due to the fact it did not initially appropriately log her correspondence as a complaint. While the landlord should have considered offering an apology for this error, it was a reasonable explanation and the short delay was unlikely to have caused the resident significant detriment.
However, the landlord’s stage two response was not issued until 42 working days after the resident’s requested her complaint be escalated. This was not appropriate and, while it thanked the resident for her patience in its response, it did not offer an apology for the delay and was not able to evidence that it kept her regularly updated regarding the progress of the complaint. This was not appropriate and meant the landlord did not act in accordance with its policy.
In recognition of these delays in its complaint handling, the landlord is ordered to pay the resident £150 compensation by way of remedy.

Determination

In accordance with paragraph 42(e) of the Housing Ombudsman Scheme, there the complaint about the landlord’s response to the resident’s concerns that it had overcharged her in regard to her 2019/2020 service charges and the subsequent effect this had on her following years’ service charges is outside of the Ombudsman’s jurisdiction.
In accordance with paragraph 52 of the Housing Ombudsman Scheme, there was:
1. Maladministration by the landlord regarding its response to the resident’s concerns over the accuracy and transparency of service charge billing.
2. No maladministration by the landlord in respect of its response to the resident’s request for her rent increase letter regarding the 2022/23 period.
3. Maladministration by the landlord in the way it handled the resident’s complaint.

Orders

The landlord is ordered to:
1. Pay the resident £500 compensation within four weeks of this report. This compensation will be paid directly to the resident, and not be attributed to any rent or service charge arrears. The compensation is comprised of:
  1. £350 (an increase on its previous offer of £150) for its failure to provide the resident with details of her service charges on multiple occasions. Its poor communication around the service charges and its poor record keeping.
  2. £150 for its poor complaint handling.
2. The landlord is ordered to carry out a case review to identify any lessons that can be learnt from this complaint and provide an action plan regarding any changes which may be needed existing processes and policies regarding its management of service charges. The landlord should write to the resident and this Service to confirm the findings of this case review within eight weeks of the date of this decision.